TO Phil Anderton, there’s little difference between Coca-Cola and Scottish rugby.
Except the world’s biggest-selling soft drinks company made a profit last year while Scottish rugby turned in a loss.
Having formerly been the global brand manager for the ubiquitous drink, Mr Anderton now has the task of promoting what the compa
ny’s annual report quotes as a sport long seen as "for posh, poofy egg-chasers" in Scotland.
Mr Anderton says: "In one respect, the concept is very similar. With Coke, it was about trying to get more people to drink more Coke. With this job, it’s about trying to get more people to watch more rugby and spend more money doing that."
But there the similarity ends.
Mr Anderton feels the Scottish Rugby Union’s financial position has been unfairly portrayed, despite the bald statistic that showed a loss of £2.6 million in 2002, a swing from the previous year’s £2.8m profit.
But the year saw increased running costs, plus the cost of setting up the Borders operation - Scotland’s third professional rugby team - estimated to have cost about £2m.
Mr Anderton chooses to focus on the areas of the SRU’s business that are within its own control. "SRU-generated income is up," he states. "The areas we have control of are doing well."
Over the last five years, total turnover has risen to £26.6m, from £17.6m while debt has been cut from £17.5m to £11.5m. Self-generated income in the period has gone from £9.59m to £17.52m - marginally less than the total income, including TV and sponsorship deals earned in 1998. He says: "I think we’re making really good progress. SRU-generated income has shown dramatic improvement in the last five years."
But he’s quick to dispel the notion that the SRU admission that it is "actively" considering a land sell-off smacked of a cash grab.
He explains: "We’re sitting on 40 acres and, given the property situation, is it the right thing to have so much of it sitting empty for most of the year when we could be generating money from it? It’s not a desperate reaction to raise money."
The biggest individual earner for the SRU is ticket revenue, which at £6.6m is about 23 per cent of last year’s £26m turnover. Hospitality, sponsorship, merchandising and TV deals form the bulk of the rest of the revenue.
"Only one third of the SRU’s income was from external sources last year," says Mr Anderton. "That’s the third that gave us the problems and saw us make a loss."
The reason behind that was the less-than-expected slice of loot from television deals related to the annual Six Nations tournament, and lower sponsorship which was affected by the wider economic downturn. "The money just didn’t come in at the level we would have liked," Mr Anderton says. "Insurance costs for players also went up quite dramatically, and other commercial costs linked to the infrastructure rose."
Earlier this year, as costs grew, the SRU paid off about 20 of its staff - which include the players and coaches of its three professional teams - leaving it with a workforce of about 200.
Despite Mr Anderton’s positive longer-term outlook, he admits the current year will be "challenging", with the SRU effectively having to pay for the "privilege" of playing in the rugby World Cup in Australia in October.
As well as the cost of new kit - because World Cup organisers won’t allow any form of sponsor advertising - Mr Anderton says costs such as insurance, travel and wages will outweigh tournament participation fees and progression bonuses.
And because the World Cup clashes with the traditional autumn test matches, the SRU will lose out on gate money and TV income which three games at Murrayfield would bring in. All in, the World Cup could cost the SRU upwards of £2m this year.
"It’s a big slug of money we’ll miss out on," says Mr Anderton, who has the remit to make rugby in Scotland financially secure, independent of any on-field success.
Having enjoyed good growth in crowds at home games over the last five years - last season averaged 50,000, compared with 32,000 in 1998/89 - and hiked income from tickets to £6.63m from £4.34m over the period, Mr Anderton feels there’s still more scope for maximising revenue from ticket sales. "Ticket money is a growth area because we’ve gone out and marketed the games to people," he says.
Bizarrely, some would argue, given the SRU’s stated goal to reward loyal fans, the game’s governors upped the price of the top tickets for the big games in the last Six Nations championship from £35 to £50. The justification is that the demand is there and it’s backed by statistics that show 94 per cent of the available £50 tickets were sold four weeks prior to the last game against Ireland.
"The demand is there for big matches," says Mr Anderton. So why not hike them even higher, and profit further?
"It’s true to say we could probably get away with putting prices up but it would be exploitative and detrimental to the other things we’re asking people to support the governing body in doing," he says.
From next year, a "two-tier" ticket pricing policy will be introduced, which will see prices for regulars pegged except for the most expensive tickets, but increased across a wider range for casual supporters.
Mr Anderton says: "This is just for the big Six Nations games. We want to reward loyal supporters while at the same time generate more income to invest back into the sport."
Specially priced batching of tickets for a series of games, such as the recent tussles with South Africa, Fiji and Romania, have also proven appealing to fans.
A new merchandising deal on an additional range of Scottish Rugby leisurewear, to complement the official range, is in the pipeline and should help generate additional revenue.
While it could be argued that rugby in Scotland has appealed to a growing audience since the dawn of the professional era in the mid-90s, Mr Anderton acknowledges that the game is still dogged by the stuffy image it earned under the committee-driven patriarchy of the amateur days. Hence the "posh, poofy egg-chasers" quote from an anonymous 15-year-old Aberdonian schoolboy in the latest report.
With an executive board and a commercial focus now steering the game, it’s hoped rugby can widen further its public appeal. The all-encompassing moniker of Scottish Rugby Union which was used in connection with the overall SRU organisation, the governing body and the product brand was redefined. In came the "parent" brand Scottish Rugby to stir the commercial side.
Aside from match-day income, money from sources such as conferencing, hospitality and concerts become increasingly important for the SRU if it is to continue to feed Scottish rugby’s ranks.
The recent appearance of pop star Robbie Williams at Murrayfield over two nights earned the SRU a "six-figure" sum. The SRU is also hoping to overturn a "voluntary" ban on alcohol sales at Murrayfield, a legacy of legislation that followed a riot at a football match between Celtic and Rangers in 1980. In comparison, beer sales at Twickenham - the home of English rugby - earns the game’s authorities there about £300,000 a year.
"Because of the law up here, we lose out on that," Mr Anderton says. "We’re now the only international rugby stadium in the world not allowed to sell alcohol." The ban also cost Murrayfield the chance to host next year’s Rugby Football League final. It went to Cardiff’s Millennium Stadium. "I’m beginning to get more confident about the ban being lifted," Mr Anderton says. "We’ve been lobbying MSPs and got some good support."
A recent study by Napier University on the impact on both Edinburgh and Scotland of the Six Nations matches showed that a single game brings a £30m boost to the Capital, with other regions of Scotland benefiting from spin-off business.
Murrayfield’s mandarins would happily drink to more of that.
Home beckoned after old job lost its sparkleAFTER attending school in Currie, Edinburgh-born Phil Anderton found himself at St Andrews University.
From there he joined consumer products giant Procter & Gamble, spending five years working for the firm in Newcastle.
Then he joined Coca-Cola, the world’s biggest soft drinks company, spending his time in London and at the firm’s headquarters in Atlanta and becoming global brand manager.
A switch to Vienna to work in the post of marketing director of colas for central Europe only made him realise that Edinburgh was where he wanted to return to after tiring of the "international merry-go-round".
After a spell working in the brewing industry, he secured the post of commercial and marketing director at the Scottish Rugby Union as it found its business legs in the early days of the professional era the game was now in.
"The SRU appealed to me because it had been restructured and had brought in an executive board," Mr Anderton says. "It offered a clean slate and a flat organisation, which meant I wouldn’t need to go through 100 different people to get a decision on something. Also, I like the idea of being involved in sport," he adds.
One of the key areas of SRU attention Mr Anderton is keen to address is the draining of revenue that unofficial hospitality operators siphon from Murrayfield, buying up tickets then packaging them into event hospitality. Only about one fifth of the hospitality packages on any match day is SRU- endorsed.
"At the moment we don’t deal with it," says Mr Anderton. "There’s nothing in the law of the land to stop it but it would be better for us if the money that’s going to unofficial hospitality providers was coming to us.
"We’re looking at ways of harnessing that. Either we can make our offering significantly better or we can look at ways of working with them and getting them on board."
